3 Famous Cases of Telemarketing Fraud

June 19, 2017, 9:17 pm36 Views

From free travel packages to payday loans to once-in-a-lifetime investment opportunities, phone scams typically sound too good to be true. They’re just tempting enough for countless people to fall victim to telemarketing fraud year after year, though. Since these scams can lead to staggering financial losses, you should know how and why to protect yourself. Get to know the warning signs of telemarketing fraud and learn how to avoid phone scams.

Recent Telemarketing Fraud Headlines

Phone scams can snare anyone, as many recent telemarketing fraud cases illustrate. Take a look at some of the most shocking telemarketing fraud headlines.

Telemarketers Scam Seniors Out of $20 Million

Seniors were the target of a multimillion dollar phone scam that ultimately included tens of thousands of people. The scammers called to sell fraud and legal protection that ended up being fake, and some of the callers even pretended to be government or bank officials. They convinced victims to provide bank account information, which the scammers used to draft checks and steal money. In 2014, the Federal Trade Commission (FTC) determined that the group of scammers had stolen over $20 million over the course of two-and-a-half years.

Fraudsters Receive $5 Million Fine for Car Buying Scam

If you’ve ever tried to sell a vehicle online, you know that it isn’t always easy to find a reliable buyer. Several victims of a car buying scam learned this the hard way after receiving illegal telemarketing calls claiming that they would connect the seller with a buyer for a fee of a few hundred dollars. The callers even offered a $99 insurance policy that refunded the initial fee if a sale didn’t happen in 90 days.

After the callers duped countless people, the FTC found the telemarketers guilty of deceptive practices in October 2013. In addition to paying a $5.1 million fine, Matthew J. Loewen and his companies can no longer engage in telemarketing or payment processing.

Scammers Fake $5 Million Film Shoots

Fake investments can be tough to spot. Recently, six scammers solicited millions of dollars to fund fake movies. In two separate cases, telemarketers posed as film producers and called potential investors to contribute funds that would serve as short-term loans. The scammers sold the deal by telling investors they would receive excellent returns on their loans or revenues from the film.

In 2014, two scammers working for C22 and four scammers working for Mutual Entertainment LLC and Film Shoot LLC were indicted on dozens of counts of mail fraud and wire fraud. In total, the six scammers defrauded nearly 150 people out of almost $5 million.

How to Avoid Phone Scams

Becoming a victim of telemarketing fraud can devastate your finances and wreak serious havoc on your savings. To avoid phone scams, keep the following steps in mind.

Understand the Law

In the U.S., federal law dictates how telemarketers can operate. Sales callers who break these rules are probably up to no good. For instance, telemarketers are only allowed to call you between 8 a.m. and 9 p.m. Any salesperson who calls you early in the morning or late at night is violating the law, which is a warning sign. In addition, telemarketers are required to tell you the name of their company and the product or service they’re selling before starting their pitch. If this information isn’t clear at the beginning of the call, get off the phone right away.

Recognize the Warning Signs

Scammers are experts at piquing your interest with fantastic offers, winning your trust, and getting you to sign up for their fraudulent deals. Fortunately, a few common red flags can alert you to a phone scam. If you hear any of these lines, the caller on the other end of the line is probably a scammer:

“You’ve been specially selected.”

“You’ve won a special offer, but you have to pay for shipping and handling.”

“This is a low-risk investment.”

“You can’t afford to miss out on this offer.”

“You must act now.”

“You trust me, right?”

“You don’t need to check out our company or do any additional research.”

Know Who’s Calling

One of the easiest ways to identify a telemarketer before becoming a victim is to know who’s calling. If you see a number you don’t recognize on your caller ID, look up the number before answering the call. If a Google search doesn’t reveal the caller’s identity, try a reverse phone number lookup, which analyzes databases that aren’t available through a simple search.

Many telemarketers, especially those who want to deceive you, block their numbers or call from private numbers. If your caller ID shows that a private or restricted number is on the other end of the line, there may be telemarketing fraud in play. Use Call Trace or a call unmasking app to find out the caller’s number. Then use a reverse number lookup tool to find out who’s calling.

Don’t Give Out Personal Information

Make a point of never revealing your personal information or account numbers to a caller or company you don’t know. If a caller already has your credit card or Social Security number and simply wants you to confirm the information, don’t do it. Simply saying “yes” or “okay” could serve as confirmation and allow a caller to proceed with enrolling you in an offer.

Ask Questions

Most phone scammers want to seal the deal as quickly as possible without having to reveal concrete information. However, you should never hesitate to ask questions, learn more about the offer, or take all the time you need to decide. Ask the caller to mail you written information about any offer before you agree to proceed. Get the company’s street address and business license number so you can research more. Look up the company’s ratings in the Better Business Bureau or the National Fraud Information Center. Always talk over the deal with someone you trust before agreeing to anything.

When you know the law, use a reverse phone number lookup tool, and keep your personal information private, you can avoid becoming another victim of phone scams. If you suspect that an illegal telemarketer has targeted you, don’t hesitate to file a complaint with the FTC.

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